As the world debates aid, the US puts its aid money out into the public

While a new deal on climate change is being debated in South Africa, another event in South Korea is trying to set a new course to make aid more effective. Craig Fagan, Senior Policy Coordinator at Transparency International, reports from the Fourth High Level Forum on Aid Effectiveness.

Part of this new agenda is making aid transparent. And in a big step forward, the US government has added its name to the list of donors putting their aid money out into the public. US Secretary of State Hillary Clinton, speaking to more than 2.000 delegates meeting in Busan, South Korea, said the US would endorse the International Aid Transparency Initiative. The initiative, launched in 2008, provides donors with a global common standard for reporting on their aid flows. More than 23 donors like the UK and the World Bank have gotten on board, including Canada earlier this week. Together, they account for more than 80 per cent of the world’s aid (sometimes called ODA).

The US decision signals that taxpayers, in both the countries giving and getting aid, will be able to follow aid money to ensure that corruption and mismanagement do not eat these flows up before the people that need them most – the poor and marginalised, women and children. It also shows that donors are taking actions to make their promises on aid transparency real.

While transparency does not solve all of aid’s promises, and there are many, it is a key precondition for making the entire aid system better governed and more accountable to communities. It helps to flag distortions and corruption early, including hidden corruption such as policy capture or when funding unfairly favours certain groups or companies.

The aid meeting in Busan, just like its sister one on climate in Durban, needs to be seen part of the same transparency game to make development more effective. Getting aid to be more transparent is the first step in this process. The next step is opening up the books on climate financing and investment flowing into countries. Let’s hope that the US, the World Bank and others will take it.